Improving cooperative management qualifications in Vietnam

ABSTRACT:

Vietnam has more than 20,000 cooperatives with more than 13.5 million member. Even though GDP generated from cooperatives increased to 6.5% in 2016, there are only 35% of cooperatives are active, the rest are still struggle to survive. At the conference on July 2016, VCAs president also admitted that one the weaknesses of Vietnamese cooperatives at the moment is management qualifications and he called for help from international organizations to support in both managerial and financial aspects. In this article, author will analysis challenges in education aspect and suggested solutions that would help to improve management qualifications.

Keywords: Cooperative, Vietnam Cooperative Alliance (VCA), management qualifications, Ministry of agricultural and rural development (MARD).

1. Current situation of cooperative managers qualifications in Vietnam

Farmers in developing countries are considered poor, uneducated and depend heavily on produces that they grow on their small land. The reasons that prevent them from growing prospect are they usually lack financial resources and are not able to take advantage of economic of scale. In order to help these farmers take advantage of economic scale and approach financial support, government establish cooperatives that gathering these small farmers into a group that so that they can increase production and income by sharing capital and reducing input costs. In more details, there are many advantages when farmers join cooperatives, they have more bargaining power, lower transaction costs in getting loans, and better access to information about its members and their resources compared to “outsiders” such as moneylenders and contractors, benefits which strengthen the cooperatives power. Farmers have more individual power and control over production, including inputs and land use, than they do through contract farming, and thus food security is less vulnerable under a cooperative model.

The new model of cooperative is where small farmers do not only join together to have cooperatives to reach financial resources or support each other, but they develop a management workforce who are experienced, young, talent and educated. These talent managers will help cooperatives and cooperative member increase income and productivity. Basically, cooperative are subjected to seven international principles. They are voluntary and open membership, member economic participation; autonomy and independence; provision of education, training, and information; cooperation among cooperatives; and concern for community.

The new cooperative model emphasizes on developing management workforce that can handle cooperatives as handle a business organization where benefit and profit are considered important. Therefore, experienced and educated and young mangers are really needed for developing and transforming cooperatives in the future.

As regulated in Cooperative Law 2012, from 1st July 2017 all cooperatives in Vietnam must operate on new cooperative form. In order to support the process of applying new cooperative form, in 2015 government adjusted the minimum salary up to 2.5 million VND.

At the conference held in Hochiminh city on July 2017 where cooperative representatives reported their operation performance and the process of apply new cooperative model. Mr. Tran Van Cung (President of An Giang Cooperative Alliance) showed his concern about transforming to new business model that combining business and information technology. He said that it was hard for his alliance to apply the new model since the management forces is lack knowledge in both management and IT. Mr. Nguyen Thanh Nam (Deputy Minister of MARBD) admitted that he was afraid that budget spent for building new cooperative business form would be ineffective and unproductive because of the limitation in management skill and IT knowledge of cooperative managers in Vietnam.

The concerns of cooperative leaders about weak management skill proved by the recent research conducted by MARD (Ministry of Agriculture and Rural Development) in 80 cooperatives in Mekong Delta. The research revealed that 53% officers who work for cooperatives graduated secondary school, 23% managers graduated high school and university. Average age of managers is 52 year-old.

During the last few years, there are many international organizations supports Vietnamese cooperatives in both finance and education, such as:

* SIDA (Swedish International Development Cooperation Agency) from 2005-2009. The project also aims to encourage dialogue between local authorities, business communities and other relevant bodies to address some of the constraints currently hindering the growth of MSEs at a provincial level, and assist local authorities in the development of economic strategies tailored to the specific needs of their localities, as well as supporting public-private partnerships to implement those strategies.

* DGRV (the German Cooperative and Raiffeisen Confederation) from 2004-2017, DGRV focus on supporting cooperatives in fields such as train managers and staff, like consultancy, advice and advocacy by DGRV cooperative experts in regional and national forums and workshops (institutional capacity building and exchange of experience) - cooperative seminars, workshops and trainings (e.g. cooperative principles, business strategy, organization, management, economic and financial performance, marketing, banking, microfinance, agricultural production, trade, cooperative auditing systems...) - individual consultancy, partnerships and various forms of cooperation.

* My.Coop was organized in Hanoi with 22 participants from farmers organizations, the VCA, vocational training institutions, Ministry of Agriculture and Rural Development (MARD) and provincial cooperative support organizations. The training program provided the participants with knowledge that can facilitate cooperative managers in sound decision-making on common services, such as supply of farm inputs and marketing.

2. Recommendations for improving cooperative management skill in Vietnam

In order to help cooperatives apply new business form in the next years successfully, government, GRMD and CTA need to consider these issues as flows:

First, Law bodies need to set minimum requirement about education and foreign language of management positions. It is obviously that number of years should be given a head so that current directors or managers have time to learn or study to meet these education requirements. Why it is necessarily for government to set these rules. One, with the current management workforce that more than 50% finished secondary school, it is impossible for them to absorb management knowledge or skills from training programs sponsored by government and international organizations. Two, directors and managers do not only gain knowledge from academic resources but they also need to go abroad to meet and exchange experiences with other successful cooperative from other countries, therefore, the requirement for foreign language must be considered. Third, even though, in the first place it is difficult to set education and language requirements for managers, but in the long term it will be a strong foundation for cooperatives to grow and prospect.

Second, cooperatives need to select young talents to engage in management positions. At the moment, average age of mangers is 52 year-old. At this age, it is really hard for them to learn and study new things since physical and mental health is not allowed them to work under high pressure for a long period. Business managers responsibilities are to study, learn, listen, analyze and make business decisions. They need to be in a good shape in both physical and mental health to make wise decisions to help cooperatives increase profit and develop cooperative bigger, stronger and gather more members. Therefore, it is a need to recruit young talents for management positions - these talents need to have some year of working experience, have appropriate degrees and foreign language skill.

Third, government should consider the minimum wages, bonus and incentives applied for cooperatives. At the moment, current minimum salaries for officers who work in cooperative field are 2.5 million VND. It is impossible for cooperatives to hire young, educated, experienced workforce if the salaries are not attractive enough. In some countries, if government could not set high salary scheme, they usually attract talents by providing attractive bonus. Bonus reflects a business success. Bonus will encourage managers to work harder, better and more efficient to achieve financial rewards. The more they contribute to cooperatives success, the higher bonus they receive. The trick here is how to set suitable expected performance that it should not too easy or too difficult to achieve. If it is too easy to achieve cooperative members will not consider it unfair policy. If it is unrealistic or too hard to accomplish, it will demotivate them.

Forth, government should financially support education for farmers descendants. At the present, most of cooperative directors, managers and officers are originated from farmers they joined together to establish a business group called cooperative. The purpose of this group is to support each other, to take advantage of economic of scale and approach financial resources. However, because of constrains in education and knowledge in business and management skill, cooperative managers have not performed well to increase income for cooperative members. Therefore, government needs to support farmers descendants to help them gain suitable degrees so that they can come back doing farm business, join cooperatives and become experienced and talent mangers that contribute to the success of their cooperatives.

REFERENCES:

1. Cooperative Law 2012

2. Decree 12/2/2015 NDCP on minimum wage

3. Vietnam Cooperative Alliance website: http://www.vca.org.vn/

4. Ministry of Agricultural and Rural Development website: http://www.mard.gov.vn/en/Pages/default.aspx

NÂNG CAO TRÌNH ĐỘ QUẢN LÝ HỢP TÁC Ở VIỆT NAM

TS. NGUYỄN HỒNG ANH

Khoa Quản trị kinh doanh - Trường Đại học Quốc tế - Đại học Quốc gia TP. Hồ Chí Minh

TÓM TẮT:

Việt Nam có hơn 20.000 hợp tác xã với hơn 13,5 triệu thành viên. Mặc dù GDP của các hợp tác xã tăng 6,5% vào năm 2016 nhưng chỉ có 35% hợp tác xã hoạt động, còn lại vẫn còn phải vật lộn để tồn tại. Tại hội nghị vào tháng 7/2016, Chủ tịch VCA cũng thừa nhận rằng một trong những điểm yếu của Hợp tác xã Việt Nam hiện nay là năng lực quản lý và kêu gọi các tổ chức quốc tế giúp đỡ trong cả khía cạnh quản lý và tài chính. Trong bài viết này, tác giả phân tích các thách thức trong lĩnh vực giáo dục và các giải pháp đề xuất có thể giúp nâng cao trình độ quản lý.

Từ khoá: Hợp tác xã, Liên minh Hợp tác xã Việt Nam (VCA), trình độ quản lý, Bộ Nông nghiệp và Phát triển Nông thôn.